Intuit refreshing TurboTax to gain market share

StevenD. Jones

--Lowering turnover key goal for new tax season

--Aiming to take share from tax stores, accountants

--Continuing investment in mobile apps

Intuit Inc.
INTU, +0.03%
will expand the capability of its TurboTax franchise as part of efforts to arrest turnover of its customer base, company executives told analysts at the company's annual investor day.

The Mountain View Calif.-based company will personalize the online presentation of TurboTax in 2013 in an effort to engage users beyond the preparation of tax forms. The redesign will expand TurboTax's ability to retain customers through future events, such as a marriage, allowing users to plan for taxes beyond a single year.

Intuit hopes the redesign will arrest customer turnover. About one-fifth of TurboTax customers don't return each year because they lose or change jobs, marry or make similar life changes, Dan Maurer, senior vice president of Inuit's consumer group said. Often times customers lose confidence in handling the tax consequence of the change even though online tools are up to the task.

"When 20% choose a new option that's something you have to reduce to grow your business," said Mr. Maurer. The new goal is to create an "experience that lasts beyond payment for the software," he said.

During 2012, Intuit's consumer tax customer base grew by 11%. But the digital category rose just 5% and its market share was nearly flat.

"That was not what we wanted," Chief Executive Brad Smith said in response to a question at the end of the meeting. Changes to TurboTax will "enable us to do what we've done for several years, and that's take share," he said.

The number of paper filers has fallen to about 5% of total returns from 10% three years ago. Over the same period, tax stores, such as H&R Block Inc.
HRB, -0.15%
and dozens of local accountants sustained their 60% market share even though using tax preparation software is usually 75% cheaper.

Intuit will boost investments in three mobile tax applications that grew smartly last year, Mr. Maurer said. Products such as SnapTax, which allows users to snap a photo of a W-2 and fill out basic tax forms on a smartphone was downloaded 2.5 million times last year.

More than 270,000 people used Intuit mobile apps to file their taxes.

In 2013, Intuit will expand the tools to allow users to use a smartphone to snap a picture of documents and finish filling out forms with TurboTax on a computer or tablet.

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